raise the minimum wage....saying 'they don't understand economics'.
That might well be the case, but his short quip is not going to change that. If the government is going to depart from public opinion, perhaps he ought to take responsibility for trying to change it with a lucid argument as to why minimum wages, if set at a high level, raise unemployment. At the end of the way, if the minimum wage remains low enough, a 'minimum wage' can mean absolutely nothing. If there are non-price reasons for a slack employment market, the 'minimum wage' will also mean absolutely nothing. If there is no global economic activity, and one must concede that there is always activity somewhere and everywhere, then there is not going to be job growth. i.e. Job growth really requires falling wages or expansion of demand. So people are not spending.
John Key might argue that he cannot respond to every criticism of the public. Well, agreed, but perhaps that repudiates his model of 'centralised' political administration. It appears Key has conceded that he is not up to the job. No, not at all, he is just going to pretend that he can solve all problems. But really all he wants to do is preside over the pretense of doing something, and get paid besides.
So, Key is partially right. NZ does not need a minimum wage increase. It would raise the spending of the wage earners, but it would likely cause a great number of businesses to close, and what damage it does there, will probably only result in more consumption, or debt repayments. If it would miraculously go into innvestment, that would be another thing....but there is little reason to expect that from any quarter. There is good reason to stop thinking arbitrary statutory laws are going to make a difference. They make things worse. We do not need more government distortion, we need less. After all, it was 'foreign' government distortion which caused the problem in the first place. Some will argue that the 'Fed' is a private organisation. Yes, but it was sanctioned by the US Congress back in the 1910s...1916 if I am not mistaken.